Belt Auction

How much should we be bidding?

Hello! My fiance and I are new to buying a house but we found one that we absolutely love after about a year of looking. We live in NJ and although prices of houses and dropping all over the country, the area we are looking to live in is still slightly overpriced. With this said, what is a good rule-of-thumb when putting a bid on a house? Should you initially ask a lower price then what is being asked and go from there? ANY advice would be appreciated!!! Thank you in advance!!!

Public Comments

1. Don't fly blind, get a local Realtor (separate from the sellers Realtor) to answer these questions for you.
2. As you pointed out things differ quite a bit all over the country. That being said, in this area of TX most of the sales are going for 90-95% of the initial asking price, on average. So an offer 10% lower than the asking price would not be insulting, or should not be, anyway. Expect to get a counteroffer, so maybe start at 15% off and haggle from there. They are going to be proud of their home and have a (probably) unrealistic idea of its value. Stick to your limits of what you want to pay and try not to let the "absolutely love" get in the way of making a wise decision.
3. The best rule of thumb is seek guidance form a local professional. Each area is different and without knowing what is going on in the local are you can't get good info. A local Realtor can find out what local homes have been selling for and you go from there. Anybody telling you to offer a certain % of a listing price is giving bad advice. List prices only gets you on the MLS in a certain market. They should be based on the market but are usually high but not by any certain amount. Sometimes seller price low because they are desperate and hoping for allot of attentions hoping for competing bids (may not work in this market). You may find a desperate seller how has listed the home below the market and the list price may be a good price. By offering too low you can miss a great deal. Somebody who knows the market will beat you to the deal. You ONLY want to base your offer on recent comps and the market NEVER the listing price.
4. It depends on the area, the real estate agent maybe better able to advise you. You should always start low as you can easily go up in price, but not so easily down in price. However, in areas that are popular or have other buyers, then you may have to offer list or more. Not knowing the exact specifications of your situation, it is difficult for anyone on the internet to say for sure what you should offer. You should look at comps for the area to determine market value and go from there.